07 Apr Setting money goals
To create a budget, or financial plan, you need to know what your long and short term goals are. Those goals will be achieved by how you save and handle money.
But, saving money and handling money responsibly can be difficult for teens, simply due to the state of your brain – it’s developing. The parts of your brain that control your impulses and help you to make good decisions are not fully formed. (Totally normal and not anyone’s fault. It’s just a fact.) That’s why setting goals is such a good idea. It can help you to stay on track and be less impulsive with your decisions about money. When you have a goal in mind, you are more likely to make choices that help you reach that goal. Setting a goal helps you to construct a plan on exactly how you are going to achieve the goal. That way, your finances are not just something that happens without your awareness or control.
What are your personal goals when it comes to money? Do you need $50 by next month or $5000? Let’s be real, $5,000 is a bit more challenging. When you set goals, make them something that you feel you can do. If needed, break up the larger goal into smaller goals that feel more attainable (meaning, doable).
Personal goals vary greatly from person to person. Some people have been blessed with lots of financial resources, so their goals might be something like, “Having $10,000 in the bank when leaving for college.” Whereas someone in more challenging circumstances might have a goal of “contributing $25 a month to my college fund” or “paying for one meal a week for my family” or even “not spending anything on things I don’t need.”
Whatever your personal circumstances, set some goals that feel right and attainable to you. Always keep in mind that those goals may be different from your best friend’s, which may require that you spend differently than one another.
Nicki’s goal was to remain debt free for the school year. She already had $230 saved, but knew that she would need to make more for the year to cover her expenses (to be discussed later).
Harrison however, had the goal of “adding $200 to my savings while still being able to go out with my friends.” Even though his beginning savings were pretty large, it didn’t really factor in to his budget, because he didn’t want to spend it – he wanted to add more to it.
What is your goal? For example, if your goal is “I want to save $200 by the end of the year” or “I want to be debt free”, then how much more money do you need to make? Or! How much less do you need to spend in order to achieve that? Yup! What you are making and what you are spending is the focus of the next two posts.
What would be a reasonable goal for you to set regarding your finances?